How to Improve Maintenance for Homeowners Insurance

Homeowners insurance adds thousands of dollars each year to the cost of owning your house. It is required in all 50 states, but there are a few ways to reduce the cost of your insurance. Your insurance company may require some maintenance and recommend improvements, if you comply with their recommendations, they can in turn provide you with lower rates.

Have a Home Inspection

The best way to determine where your home can be improved is to have a home inspection. Inspection costs a few hundred to a few thousand dollars, depending on the person you hire. For example a typical home inspector will charge $300 to $400 for an inspection. A structural engineer, on the other hand, also completes home inspections and can charge $2000 to $3000 per inspection.

An inspector will look at a few typical areas: water & plumbing, windows, roof, fire safety, electrical work and foundation stability. The inspector will make recommendations to make sure your home is up to code and will notify you of any structural damage.

Weigh the Cost of Repairs

You can get an estimate from a contractor for the repairs suggested by your inspector. Most contractors will do this for free. They will base their estimate on the basic needed, and they may also make suggestions to improve your home further with aesthetic or technological repairs. You should be aware that increasing the value of your home may increase the cost of insurance and taxes, so you do not want to over-improve. Instead, weigh how much the recommended repair would cost against what your insurance company believes you could save in premium. In some cases, the inspector may tell you there is no choice but to make the repair. For example, if you have exposed live wires in your basement, you will need to pay to get them fixed.

Run Loss Reports

At the end of each policy period, you can run a report on how much you have "lost" in a given year. For this report, ask your insurance company for any claims. You can also add on any expenses you paid for yourself out of pocket and did not file with the insurance company. Once you have a cohesive list of your repairs, you will begin to see trends. If you have filed a number of claims for one nagging problem, like a leaking roof, then it may be time to repair the roof.

Manage Losses in the Future

Your loss report can show you steps toward better maintenance and lower claims in the future. For example, if you have claims from tree branches falling on your roof, maybe you need to trim your trees more regularly. When it comes to your home insurance, you should think like a businessperson. You can implement a policy that will significantly improve your bottom line if you pay attention to details and are willing to put the work in. It may not seem like a big change at first, but over the life of your policy you will recognize savings.